We have previously discussed, most recently here and here, the tremendous largesse afforded Dr William McGuire, the CEO of UnitedHealth Group by his board of directors. Although UnitedHealth's mission statement includes improving access and making health care more affordable, Dr McGuire now owns approximately $1.6 billion worth of unexercised stock options. We also discussed (here and here) the potentially major conflicts of interest affecting several UnitedHealth board members who are also leaders of not-for-profit academic and research health care or organizations.
Now various news services (for example, the Associated Press) have reported the UnitedHealth had admitted a "significant deficiency" in its handling of stock options, and warned that it may have to restate its earnings over several years, it is the subject of an "informal inquiry" by the US Securities and Exchange Commission (SEC), it may have an added tax liability for some of the stock options given to managers, seven lawsuits have been filed by shareholders, and that an unidentified shareholder demanded that the board "take action to remedy breaches of fiduciary duties and unjust enrichment by the directors and certain officers in connection with the company's stock option granting practices."
We have discussed how early advocates of managed care called for "breaking up the [physicians] guild" and handing the power to run health care over to managers and bureaucrats, like those who run UnitedHealth. Now people in the investment world may be starting to understand what managers and bureaucrats have done with with this power. We physicians on the ground in the health care world have been seeing these effects for a while.
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